Air India has a monthly shortfall of about Rs400 crore and banks had become jittery about lending to it after the government announced plans to privatize the airline in June. Photo: Hindustan Times

New Delhi: Air India Ltd’s largest pilot grouping has come out in support of privatisation of the airline, but added its own set of caveats.

“All newspapers are carrying news articles related to the plans of Government of India disinvestment and/or privatization of Air India. We as a responsible union are not averse to the decision of the Government as we are confident that the Government will act keeping in mind the best interest of the airline which has served the nation for decades,” said T. Praveen Keerthi, general secretary of Indian Pilots Commercial Association (ICPA) wrote in a 6 September letter to aviation minister Ashok Gajapathi Raju.

Mint has reviewed a copy of the letter. The pilot grouping added that their dues should be cleared immediately.

“In view of the decision taken by the government of India regarding disinvestment and/or privatization of Air India, we request the Government to issue orders for release of the withheld 25% dues immediately. As owner of the airline the Central Government is fully liable for this payment, the transfer of ownership can take place with clean financial statements once all the dues are cleared by Air India or the owner, the government of India,” he added.

The airline has held back some dues due to the financial strain on its books. Since 2012, it has received about Rs25,000 crore as equity from the government.

Air India has a monthly shortfall of about Rs400 crore and banks had become jittery about lending to it after the government announced plans to privatize the airline in June.

It also noted that the Cabinet Committee on Economic Affairs (CCEA), in its meeting held on 28 June, had given an in-principle approval for considering strategic disinvestment of Air India and its five subsidiaries and also approved the appointment of advisors for this.

Air India has also put on hold employee contracts that were coming up for renewal as the government prepares for the airline’s privatization.

“All proposals received for post-retirement engagement of employees and renewals may be kept in abeyance till further orders except for operational/licensed category which has to be put up through personnel department,” V. Hejmadi, director, personnel and finance, Air India, said in a letter to the airline’s top management on 30 August.

The aviation ministry told Parliament last month that it would continue to support Air India as per the approved turnaround plan and would honour financial obligations till further directions.